Why is North Pole, Inc. Changing Their Business?

Major events at North Pole, Inc. are driving speculation about stability at the company. Over the last week, the company has made layoff announcements, had visits from government and business leaders, and met with Sara Palin (see "Sara Palin Visits Santa Claus").

Last week, the stock price fell 8% on fears of that Santa Claus, CEO of North Pole, Inc, cannot do the belt-tightening needed to keep the company out of the red. As the price dropped, fears grew of a leveraged buyout by Easter Bunny's hedge fund, known for dismantling Halloween Ltd. and other holiday related companies.

Last week, Claus announced layoffs (see "Santa Laying Off 30% of US Elves on Shelves" article). As a sign of good faith, he also has asked the North Pole board of directors to consider scaling back his normal year end bonus of two Mercedes Benz automobiles (one for him and one for Mrs. Claus), the annual December 26 massage therapy for the reindeer VP's, and bonuses based on the number of children convinced to be nice. Stock options remain in place. The announcement calmed markets and the stock rose 3.5%.

"We are working with our operations organization to find cost savings in the manufacturing area. One cost saving plan is to increase gift card production. They are easy to make and inexpensive. Using more of these will lead to an increase in shareholder value," Claus explained on Thursday when cornered by a reporter.

Speculation was increased on Friday, when Jeff Bezos, Amazon's CEO, and the Director of the NSA were seen entering the US headquarters of North Pole, Inc. in Rudolph, WI. Employees at the Rudolph office were spotted piloting drones on the reindeer training track. Investors' belief that North Pole, Inc. is replacing Elves on Shelves with drones caused a flurry of stock activity. Amazon stock and the stock of several aerospace companies rose on the rumors.

Later in the day, controversy arose when Claus announced a partnership with the US military to protect his sleigh. The visit from the Director of the NSA may result in a similar controversy since industry experts believe it could result in a cost-cutting partnership for child monitoring. Combining the drones and NSA's tracking of texts, North Pole, Inc. could track all US children with fewer elves. Most experts believe the technology will not be available until 2016. That leaves a two year gap between Elf layoffs and drone operations leaving many to wonder if they can misbehave for the next two years. Considering the lack of bonuses for well behaved children, many parents, teachers, and nannies should fear 2014 and 2015.